Food for thought. In 2006, Tut Bailey and Kim Erickson, two of my former Penn State Outreach colleagues, conducted a study I had carried through in 2000, 2002, and 2004 ... The State of Continuing Education Marketing. Since then, the association (UPCEA, formerly UCEA) has conducted the study and recommends that 10% of gross revenues be set aside for marketing. This would include media, personnel and operating costs associated to marketing. In 2006, Bailey and Erickson said that number should be 8% and my number (and Tut Bailey's) in 2004 was 13%.
MarketingSherpa http://www.marketingsherpa.com/article.php?ident=31641just released a report on B2B marketing regarding marketing budgets and suggested that 6% of revenues for larger companies (more than a 1,000 employees) be set aside, 9% for medium size companies and 11% for smaller companies (less than 100 employees). Acknowledging that B2B differs from continuing education marketing, the MarketingSherpa report provides yet another benchmark. Bailey and Erickson suggested, although with a different definition of small, medium and large, to be 8%, 6% and 7% respectively. The analysis that Tut Bailey and I did in 2004 showed 23%, 9% and 8%. The issue for smaller operations at the time was the trend to get programs online and invest in marketing despite the organization's size. It was a race for survival.
While it may not be anything new, it's more food for thought and confirmation if you need a benchmark. My read on this for continuing education is 8% to 15% for smaller organizations, 6% to 12% for medium size organizations and 6% to 8% for larger organizations.
However, it should not always be this type of cookie cutter ... you need to adapt your budget based on a number of considerations:
- Are you launching any new initiatives that you need to gain awareness?
- Are you spending more because of shifting media?
- Are you spending more or less based on digital initiatives?
- Do you have the right metrics to track the effectiveness of your spend?
- If you increase your budget, are you going to be spending it wisely? This translate into "what is your plan or strategy?" My good friend Judah R. once told me "Just because you say my organization needs to get to 10% doesn't mean that I am going to spend good money after bad."
- You should consider having a market research budget of 1/2 percent more or less. A 2008 Corporate Executive Board shows 0.62% while the American Marketing Association state 1/2 a percent in 2000.
Hope the numbers are helpful. Please consider them a starting point to move up or down from, as they need to be adapted based on your situation. Don't fall into the "me too" trap.
MarketingSherpa http://www.marketingsherpa.com/article.php?ident=31641just released a report on B2B marketing regarding marketing budgets and suggested that 6% of revenues for larger companies (more than a 1,000 employees) be set aside, 9% for medium size companies and 11% for smaller companies (less than 100 employees). Acknowledging that B2B differs from continuing education marketing, the MarketingSherpa report provides yet another benchmark. Bailey and Erickson suggested, although with a different definition of small, medium and large, to be 8%, 6% and 7% respectively. The analysis that Tut Bailey and I did in 2004 showed 23%, 9% and 8%. The issue for smaller operations at the time was the trend to get programs online and invest in marketing despite the organization's size. It was a race for survival.
While it may not be anything new, it's more food for thought and confirmation if you need a benchmark. My read on this for continuing education is 8% to 15% for smaller organizations, 6% to 12% for medium size organizations and 6% to 8% for larger organizations.
However, it should not always be this type of cookie cutter ... you need to adapt your budget based on a number of considerations:
- Are you launching any new initiatives that you need to gain awareness?
- Are you spending more because of shifting media?
- Are you spending more or less based on digital initiatives?
- Do you have the right metrics to track the effectiveness of your spend?
- If you increase your budget, are you going to be spending it wisely? This translate into "what is your plan or strategy?" My good friend Judah R. once told me "Just because you say my organization needs to get to 10% doesn't mean that I am going to spend good money after bad."
- You should consider having a market research budget of 1/2 percent more or less. A 2008 Corporate Executive Board shows 0.62% while the American Marketing Association state 1/2 a percent in 2000.
Hope the numbers are helpful. Please consider them a starting point to move up or down from, as they need to be adapted based on your situation. Don't fall into the "me too" trap.
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